Based in South West England, with offices in Exeter, Yeovil, Wells and Melksham, Old Mill Accountants and Financial Planners are passionate about helping clients to become more successful. Working proactively as an integrated team, Old Mill helps individuals and businesses to achieve their financial goals, which include growing their businesses, retirement planning and long-term investment strategies.
As part of Finance Monthly’s Ask the Expert feature, earlier this month we caught up with Tony Hawes – a Chartered Financial Planner and Fellow of the Personal Finance Society (PFS) whose main focus is working with and advising owner managed and family businesses as part of Old Mill’s Commercial team.
What are the typical challenges that clients approach you with in relation to the management of their finances?
Clients rightly expect high standards of knowledge and professionalism when it comes to the management of their affairs. They want a trusted adviser who understands their needs and will support them in the long term. Of course, the firm must offer a competitive product range but in my experience, this is of secondary importance to the quality of the adviser/client relationship
What are the challenges presented by the ever changing regulatory environment of the financial planning sector?
Regulatory change is inevitable and ‘part and parcel’ of the financial services world. The real challenge is ‘how can we use these challenges to improve the way we look after our clients?’
Recent GDPR and MIFID 2 regulations highlight the need for increased transparency and we need to examine the way we use personal information about our clients. The introduction of online ‘portals’ allow our clients to access valuable information about their finances at the touch of a button.
Another recent innovation is the introduction of a new document management system which is helping to streamline processes in our journey towards the paperless office.
Having a robust process in place helps ensure that high standards of compliance are achieved and we were particularly pleased to be recognised in this respect in being awarded BS8577 by Standard International for the third consecutive year for the quality of our financial planning practice.
It is however, important not to allow compliance with regulation to drive your business strategy. The healthiest approach is always to focus on building a process which works in the best interest of your client and then overlay this with current regulatory compliance requirements.
What are the most common tax planning solutions that you offer to clients?
It’s important to look at the bigger picture when it comes to tax planning. A good example of this is taking time to consider which business structure is most suitable for the client as incorporated and unincorporated businesses each have different operating requirements, risks and tax treatment.
Common solutions would also include ‘remuneration engineering’ or in other words, how to extract profit in the most tax efficient way using a combination of salary, dividend and pension planning.
Company Directors and key employees can become members of a company sponsored pension scheme such as a SSAS (Small Self-Administered Scheme) which allows them the flexibility to make wide ranging investments such as acquisition of commercial property whilst enjoying valuable tax breaks on contributions and growth.
Of course, there are a number of opportunities available for the individual too such as:
- The ability to reclaim income tax paid and/or defer Capital Gains by investing into EIS/BPR qualifying schemes despite Government proposals to make changes in this area.
- This type of investment remains an important tax planning ‘tool’ for the right client and can be very useful as a part of wider restructuring exercises which could give rise to taxable gains. Of course, advice is important to properly assess the risks involved.
What are the most important aspects that need to be ironed out in order to achieve satisfactory result and a well organised financial plan for your clients?
My methodology is always to ‘start with the end in mind’ and focus on the outcome when it comes to creation of the client’s financial plan and this means establishing clear personal objectives from the outset.
This means asking the right questions: ‘At what age does the client want to achieve financial freedom from the business? And indeed: ‘What does financial freedom mean to the client?’
I also need to understand what resources are currently available in order to help organise these resources and give the client the best chance of success.